ESTATE OF WOLL, BY WOLL v. US, EV 91-190-C.
| Decision Date | 02 July 1992 |
| Docket Number | No. EV 91-190-C.,EV 91-190-C. |
| Citation | 809 F. Supp. 643 |
| Parties | ESTATE OF Albert A. WOLL, by David WOLL Co-Trustee of the Third Restatement of Inter Vivos Revocable Trust for the Benefit of Albert A. Woll, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
Alan N. Shovers, Kahn Dees Donovan & Kahn, Evansville, IN, for Albert A. Woll Estate.
Stephen T. Lyons, U.S. Dept. of Justice Tax Div., Washington, DC, Deborah J. Daniels, U.S. Atty., Indianapolis, IN, for U.S.
This matter comes before the Court on cross motions for summary judgment. Both motions address the same points of law and are discussed together.
Albert and Pearl Woll each established separate trusts during their lifetimes. Pearl died in July 1985, survived by her husband, Albert. Pearl's trust provided for the creation of two trusts upon her death: Albert A. Woll Credit Trust and Albert A. Woll Marital Trust. Only the Albert A. Woll Marital Trust (PWT)1 subsequently created the tax consequences which are the subject of this suit. The PWT provided for income and principle to be paid to Albert. Albert remarried; Sarah was his second wife. Albert died 8 August 1987. Albert's trust (AWT) provided for payment of monies to Sarah until her death. The PWT further provided that upon the death of Albert (following the death of Pearl), payments were to be made to their children. It is this last transfer which generated tax consequences which are the subject of this suit. The issue before this Court is whether the PWT or the AWT must bear those taxes. The Estate filed an estate tax return placing this tax burden on the PWT. Following an audit, the United States placed the tax burden on the AWT. The Estate, after exhausting its administrative remedies, paid the tax and brought this suit seeking a refund. Other facts will be provided as needed throughout this memorandum.
The parties agree that Indiana law governs the interpretation of the trusts and have cited two statutes.
Unless a decedent shall otherwise direct by will, the federal estate tax imposed upon decedent's estate, shall be apportioned among all of the persons, heirs and beneficiaries of decedent's estate who receive any property which is includable in the total gross estate of said decedent for the purpose of determining the amount of federal estate tax to be paid by said estate, Provided, That no part of the federal estate tax shall be apportioned against property which, in the absence of any apportionment whatsoever, would qualify for any charitable, marital or other deduction or exemption, nor against recipients of such property on account thereof.
IC XX-X-XX-X (emphasis added).
IC XX-X-XX-X (emphasis added). Additionally, one other section is important to the analysis of these two sections of the Indiana Code.
As used in this chapter, "will" includes a trust or other instrument governing the distribution of assets following an individual's death.
IC XX-X-XX-X.5. Thus, §§ 2 and 7 above which use the word "will" apply to the trusts at issue in this case. Since §§ 2 and 7 permit the decedent to designate how estate taxes will be divided, the Court must first determine whether such a designation was made in this instance. Since the PWT is the trust generating tax consequences at issue in this case, it must be examined first to determine if it designates the allocation of the tax burden.
Article VI of the PWT has one section and addresses the Albert A. Woll Marital Trust.
In the event ALBERT A. WOLL shall survive the Donor and, at the time of her death, shall have been living with her as her Husband, then all the rest and residue of the Donor's trust estate not hereinabove disposed of in Articles IV and V hereof, shall be set aside for the use and benefit of the said ALBERT A. WOLL for the remainder of his life. The Successor Co-Trustees shall distribute to him at periodic intervals, all the net income and so much of the principle of the trust estate as he may request from time to time. At the time of his death, the trust estate shall be utilized and/or distributed according to the provisions of Section 5.04 through 5.08.
PWT, Section 6.01. Disposition of Revenue. (emphasis added). As directed by Article VI, distribution at the time of Albert's death is in accordance with §§ 5.04 through 5.08. Of those sections, § 5.05 addresses distribution after the death of both Albert and Pearl.
As soon as practical after the death of the survivor of PEARL L. WOLL and ALBERT A. WOLL, and after the payment of all estate, inheritance and succession taxes owing, as provided in Article IV hereof, then distribution shall be made to the children.
PWT, Section 5.05. Distribution After Death of Survivor of Husband and Wife. (emphasis added). This section directs the payment of "all estate, inheritance and succession taxes owing, as provided in ...
To continue reading
Request your trial
-
Indiana Hi-Rail Corp. v. CSX Transp., Inc.
...the view that oral argument would not "substantially contribute to the resolution of the defendant's Motion." Estate of Woll v. United States, 809 F.Supp. 643, 645 (S.D.Ind.1992). 2 CSXT argues that Indiana law, the substantive law of the forum state, applies in this case. Brief in Support ......
-
Estate of Woll by Woll v. U.S.
...district court found it unnecessary to consider any of the provisions in the AWT and Albert's will relating to the payment of taxes. 809 F.Supp. 643, 645. Finally, although the Pearl Trust ostensibly authorized the payment of taxes only insofar as such taxes resulted from the death of the "......